Termination vs. continuation of health coverage
Draconator
3 Posts
An 18 year employee at our company had a stroke last August. He has been off work since, but we have continued to pay his medical. We have not heard anything in terms of his returning to work.
I have been requested by the owner of the company to stop his health coverage and to place him on COBRA. Do we need to terminate him prior to this, or can he still be technically an employee of the company? From what I understand, he has to be off a year before we can do this. Is this correct?
Thanks!
Comments
What state are you in? Federal law only requires that you keep benefits whole for a maximum of 12 weeks. Most state's MLAs run concurrent with FMLA if there is one. California is the only one I know who might be different, but definitely it is not a whole year.
What are the statuses under your health insurance contract? Can you even have an employee in a status that is LOA that isn't eligible for coverage except through COBRA? I know our contract has a specific amount of time past FMLA that a non-active employee can stay on the plan without moving to COBRA. And it is no where near 1 year....
I am not sure where you got the one year limitation. Was that from the insurance contract? If so, that is probably a maximum not a minimum. Was if from a company policy or union contract? If so, you want to stick to it so as to not unintentionally discriminate. I don't know of any state, and definitely no federal, requirements for a one year limitation.
I guess my question is why not terminate at this point? Is it just a morale factor (for him or other employees)? What other benefits would it affect? He has been gone almost 9 months.
No, that is not correct. Depending on how large your company is, what your contract with your insurance carrier states, and what state you are in will have a bearing on how long you should continue health insurance and/or consider the employee an employee.
If you have 50 or more employees within a 75-mile radius, then you have FMLA to consider (which would be 12 weeks). Depending on your state, you might have a state version of FMLA that you also must follow. Other than that, you are free to follow your policies regarding termination.
You also need to consider your health insurance contract because you do not want to risk having your insurance policy terminated for ALL employees because you did not follow the contract. For example, my contract only allows me to keep a non-active employee for 1 week past their FMLA eligibility. Other than that, the employee must be activily working full-time (including vacation, holiday and PTO).
Based on my company policy (and previous precidence) for an employee who had a stroke last August, would have been terminated no later than last December 1 and put on COBRA. And could have been terminated prior to that if they had previously used some of their FMLA eligibility since we run on a rolling calendar.
There are a few issues here.
1) Does FMLA apply to your company? If not, consult with an attorney before you do anything to this person's status regarding employment, benefits, or anything else.
2) Has anybody had any sort of ADA discussion with this person? Are you clear that this person cannot ask for accomodation on his own? Are you clear that this person has not had an ADA discussion with any member of management? Has anybody asked him why he cannot return to work? I think this is a less clear cut issue than FMLA, if FMLA applies to your business.
3) "Reduction in hours" resulting in loss of eligibility for benefits is a COBRA qualifying event even for continuing employees. We have had, for various reasons, benefits plan participants under COBRA continuation of coverage that are employees and those that are non-employees. Technically, you are responsible for getting the COBRA notification out within 2 weeks of the event, itself. It sounds like your company is making the decision to officially reduce his scheduled hours in keeping with his hours actually worked. If FMLA applies, this may be a very bad idea.
Be aware also of the potential for bad press in cutting off the guy's benefits without notice even if the company is perfectly within its righs to do so.
I don't see the need for any ADA discussion. The employee has not worked in 9 months. Even under ADA, you have to be able to at least show up for work. Then you worry about accomadations.
I see this more as the fact that the employer has been more than generous with the employee by carrying their benefits for so long. And again, I go back to the fact if the insurance company knew that this person was not working, would they cancel ALL the employees benefits? Now THAT would be bad press.
I would agree with TXHRGuy's assessment if this employee was working some of the time.
Just to answer a few points.
We are in California.
No one has discussed ADA with him. It would be my responsibility, and I have not has this discussion with him.
California is an at will state, so termination would not be a problem. Yet I know we could be opening ourselves up for a potential suit. I agree that due to the reduction of hours, we could place him on COBRA. Yet to be honest, this employee has been saying, "I am seeing the doctor next Tuesday", and it has continued for these 8 months. Yes, we have been more than generous. We have to move forward, and termination due to his inability to work would be ok. (I think.) I just want to be extra careful. Make sense?
[quote user="LadyAnn"] I don't see the need for any ADA discussion. The employee has not worked in 9 months. Even under ADA, you have to be able to at least show up for work. Then you worry about accomadations.[/quote]
I know I'm more conservative on this than a lot of others are. We lack a lot of facts. For example: what if, as a result of the stroke, the person is unable to articulate a request for accomodation and is not showing up to work because of his own perception that he cannot perform his job? In any event, I grant you that this is not the biggest thing on the table.
[quote user="LadyAnn"]I see this more as the fact that the employer has been more than generous with the employee by carrying their benefits for so long. And again, I go back to the fact if the insurance company knew that this person was not working, would they cancel ALL the employees benefits? Now THAT would be bad press.[/quote]
This is where my FMLA heartache comes in. IF FMLA applies, which we still don't know, then what FMLA written communication has occured? The extent to which Ragsdale applies has a lot to do with what the employee was allowed or led to believe and whether the employee works in a state covered by the 8th circuit or a concurring circuit (e.g., the 11th). Without Ragsdale, if FMLA applies and if there has been no communication, the clock hasn't started yet without risking becoming a test case to see if Ragsdale will be supported in the relevant circuit.
[quote user="LadyAnn"]I would agree with TXHRGuy's assessment if this employee was working some of the time.[/quote]
I would be pushing the button harder instead of saying "I know I'm more conservative than some people on this issue dot dot dot" I rearlly don't think ADA is the biggest issue on the table or, even, a large issue on the table depending on what is known about the state of the individual. I'd be more comfortable knowing about more about the person's capacity to reason or communicate on their own before completely crossing it off my list.
[quote user="Draconator"]We are in California.[/quote]
If FMLA applies to you, then you need to know what the history of written communication has been and the extent to which Ragsdale is supported in the 9th circuit. "At-will" will not prevent you from losing a suit if the individual's rights under FMLA as construed in the 9th circuit are violated. If Ragsdale is supported, you've certainly given him long enough. However, under Ragsdale, there was a set time frame for the company-permitted leave. If there has been no set timer on this for a lack of policy or, at least, a communicated expectation (in writing), then I'd set a reasonable time frame for the employee to return to work rather than simply telling him it's been too long and good bye. What's reasonable should be discussed with counsel.
In looking for what I was thinking about under ADA, it doesn't apply to this person. Something might, but what I was looking at doesn't apply. He cannot be a person with an intellectual disability under the regs because this happened to him after he was 18. That doesn't mean that no part of ADA applies, it just means that the part I was thinking about does not.
Draconator - the one thing that most of the other posters have talked about is FMLA and I don't think the question has been answered yet. Is this applicable to your organization? If so, did you put this person on FMLA when this happened? If FMLA is applicable and you did not start that clock then I think you are obligated as an employer to put him on FMLA before you terminate him.
[quote user="IT HR"] If FMLA is applicable and you did not start that clock then I think you are obligated as an employer to put him on FMLA before you terminate him.[/quote]
That depends on how the details of Ragsdale are viewed by the relevant circuit. If the relevant circuit follows in lock step with the 8th circuit, then some details that we don't have available should be discussed with counsel.
Thanks for catching that TXHRGuy. I'm not sure where I was going with that when I was typing it earlier. It is called working on 4 different things at once and not rereading what I had typed! [:)]
What I had wanted to add in my last post is what has been done in the past? Is this the first situation of this kind or what precedent has been set prior to this? If FMLA is not applicable with this organization, how have LOA's been handled in the past? Want to make sure things are being handled consistently.